The race is on... it's time to start capturing your customers goodwill.
If you own a small or medium sized business then this could well be the most important article you’ll ever read. Want to know what the problem is, what should you be doing about it and what’s the best way to do that right now? Let’s first set the stage, so you can appreciate the race you’re currently in, even if you don’t know it…
“There will be some people who have no options other than to close the doors.”
Growing numbers of SME owners over the age of 55 are about to start looking to sell their businesses - but may be in for a rude surprise, according to research published by accountancy firm PwC in February 2014.
PwC projects that, as of June 2024, a third of all private business owners will be over the age of 55 - the “baby boomer” generation. Their analysis warns a lack of exit planning by this aging population of small business owners could have serious consequences for the owners’ wealth, the businesses’ productivity, employment and even survival; and cause a ripple effect throughout the economy. This effect will easily reach into the billions here in New Zealand alone.
PwC partner Sue Prestney says rather than expect to achieve an optimal exit within a very short lead time, business owners need to plan early and carefully for their eventual departure, adding: “There will be some people who have no options other than to close the doors.”
Biz Exchange chairman David Bird agrees that SME owners rarely plan for contingencies outside passing the business on to family. “They weren’t expecting to sell their business, they were expecting to hand it on,” he said. Bird went on to advise baby boomers looking to exit their small business to think beyond selling to family members and consider selling to, for example, Asian purchasers who might be in the same line.
Even if you have no intention of selling your business, what you need to recognise is that the next generation of business owners - competing in the same marketplace as you - will be exponentially more digital-savvy, and equally more tuned in to the modern tools of marketing. So whether planning to sell or not, here’s what you’ll need to do. And remember a growing goodwill asset is tax free upon realisation.
Start with the numbers
Don’t assume that just having the best numbers will make your business the most appealing acquisition. Sure, the numbers will play a significant part in the value of your business, but how you go about attaining them - and recording that related activity - will now help differentiate your business and increase the appeal of your proposition.
If you break down the day-to-day activities of your business into the seven sole things that can change your numbers, then you can begin to consider what it is that genuinely makes these numbers grow.
• Retain customers
• Attract new customers
• Convert enquiries
• Increase frequency of purchases
• Increase average sales
• Reduce cost of goods = margin management
• Manage your overheads
What are the 2 ways to best impact every single one of these activities?
1. Manage your time efficiently
2. Adopt a goodwill strategy!
Start investing your time, energy and money into building the goodwill rating of your business, and from day one you’ll be making your business more profitable and more sellable. A goodwill strategy is very simply launched by capturing your customer’s details and using their opinions as the basis of your marketing strategy.
• Retain customers - Your ability to retain customers improves when you communicate more effectively and frequently with them.
• Attract new customers - Your ability to attract new customers increases when your messages are exposed to more people and the information they get about your business makes you more appealing.
• Convert enquiries - You will convert more enquiries if customers arrive with a higher opinion of you and a greater trust that they’ve come to the right place.
• Increase frequency of purchases - If you keep in contact with your customers and let them know about opportunities, you increase the likelihood of them returning more often.
• Increase average sales - Increased demand puts you in a better position to increase prices. Your ability to upsell also improves when you have a better relationship.
• Reduce cost of goods - With all this positive activity happening, and improved volumes, you may be in a position to negotiate better discount buying rates from suppliers
• Manage your overheads - Your expenses can be even better managed when staff are recognised. They’ll buy-in to improved efficiencies and participate in your overall goodwill strategy.
Fully cognisant of the approaching wave of business handovers, Australasian accounting software giant MYOB has partnered with New Zealand marketing innovator Amplifier International to nail down a “goodwill metric.”
The pair have jointly commissioned a University of Otago study to see if a company’s goodwill can in fact be rated and given a score – thereby increasing its appeal to potential buyers.
MYOB came to recognise that many of the intangibles that account for a business’s goodwill, can now actually be measured. By partnering with Amplifier, who’ve developed a system garnering the world’s highest conversion rate of customers into reviews, MYOB has been able to gain ground-breaking insights within the field. In particular these relate to how a database strategy – working in parallel with word of mouth marketing, and digital strategies - can capture figures that accurately quantify how much goodwill a business is accumulating.
Leveraging an algorithm that takes into account the relative appeal and impact of the tabulated variables below, MYOB will be encouraging its software users to activate their Amplifier add-on and start growing their goodwill rating immediately. Longer term, they hope that business buyers will seek out and rely upon the goodwill rating to determine a “goodwill” proportion of business value. “Having these assets captured and available to transfer to a new owner is of huge appeal,” MYOB Direct Sales Manager, Paul Buchanan said.
Amplifier International director Roy Hawker points out the system adopts a slight shift away from numbers, towards names. “The numbers will ultimately reflect the relationships your business has built with both customers and suppliers. As many great businesses have discovered: by focusing on these relationships, to a large extent the numbers take care of themselves.” True to its name, Amplifier focuses on amplifying these relationships and capturing the goodwill generated through multiple activities, many cleverly automated to save business owners time and money.
There’s no better time to start building the value and appeal of your business than now.
Happily, it’s a win-win, because what you’ll discover in the process is that the very same things that make you worth more long term, also make you more profitable in the short term. The goodwill your business builds can now be rated. That rating could well determine not just what your business is worth to sell, but ultimately whether it sells at all, or has to close its doors in line with PwC’s predictions. You can start the process in the simplest way possible today, just by making sure you’ve captured the details of those customers you’ve come into contact with.
Below is a summary of the powerful portfolio of services available through Amplifier, accessible via a business’s MYOB portal:
Amplifier provides you with customer entry forms. Place customer details directly into the Amplifier database system or simply export details from you current database system.
You determine which customers you’d like to request a review from - the Amplifier system then makes the turnkey process simple, fun and rewarding for your customers.
Respond to Reviews
Your Amplifier portal allows you to respond to each review, along with emailing the customer directly, manually posting the review to your Social Media platforms, or removing it.
Ranked by Review Premier Listing
Your Ranked by Review Premier Listing acts as the hub to connect all your online profiles and reviews. Equivalent to other directory’s Platinum listings.
Spread to Social Media platforms
Amplifier posts your positive word of mouth reviews onto your following Social Media pages: Facebook, Twitter, Google Plus, YouTube and Linked In.
Reviews feed onto your Website
Amplifier provides your website developer with a simple piece of code so that your reviews can appear on your website.
Each time you log into Amplifier your dashboard will display 19 statistics on how you are performing, alongside your all important Goodwill Score.
Amplifier will set up your Local Google presence and ensure all your reviews count as content to assist you with your ranking. This content will have a significant impact on your Google ranking.
Amplifier will design a mobile-compatible website for your business. All mobile searches will be redirected to a mobile-friendly version of your website.
Staff Recognition Report
Each month receive a detailed report on how many customers each staff member has seen, the number of reviews their interactions have generated and the average score they received.
Survey Tool + Templates
Amplifier provides you with a complete survey tool for you to survey your clients. Amplifier also has 7 proven survey templates for you to use to glean valuable information from your customers.
Kulutu Mail is a proven email communication strategy that designs relevant, interesting, unobtrusive, remarkable and short messages to connect you with your customer base.
Amplifier provides an email newsletter template builder along with offering email credits for you to market your sales, events, promotions and deals to your customer base.
SMS (Text) Campaigns
Amplifier provides an automated text/sms system along with offering text credits for you to market your sales, events, promotions and deals to your customer base.
The Amplifier ‘Be Found’ and ‘Connect’ packages are only available to 3 businesses per industry, per region - ensuring a significant competitive advantage.